The New Lord of Digital Viewing: Google or Netflix?

If you are a movie buff like me, the news about YouTube getting into the movie rental business must not have skipped your attention. Google's (Nasdaq: GOOG) YouTube online video service will start renting out blockbusters like "Inception" on a pay-per-view basis.

According to some, Google has now come head-to-head with movie rental company Netflix (Nasdaq: NFLX) . But there are other adversaries lurking behind. What does it mean for Foolish investors?

Video killed the radio starIn today's world, video is no longer a word only associated with TV or computer screens. It has moved far beyond that scale, becoming a phenomenon accessible from anywhere -- phones, tablets, laptops, etc.

And in that greater sphere, YouTube has been the place to find everything from music and movie trailers to home video clips. According to YouTube's blog, the site clocks nearly 2 billion views per day. It also said that users spend close to 15 minutes watching YouTube, while they spend five hours on the television. YouTube's future strategy will therefore depend on the immediacy and significance of the shift of consumer preference toward online media.

For Netflix, the biggest online streaming movie rental service provider, this new business focus for YouTube might mean war. Google has the chance to take a bite out of its customer base. While going head to head with Google has its disadvantages, Netflix might actually not be going for a head-on collision here. The targeted market segments for each company are actually different.

Newer titles will cost $3.99 on a pay-per-view basis. YouTube's movie offering would include old classics like Taxi Driver and Goodfellas, as well as more recent blockbusters like Inception and King's Speech.

YouTube will let viewers pay a certain price per movie and then they'll normally have 30 days to watch it. When viewers start watching a movie, they will typically have 24 hours to finish it. There are also some free movies available on the Google Movies website.

So is it safe for Netflix?Netflix's subscription plan, however, is clearly different from the one described above. Netflix users pay a certain amount each month, and it covers unlimited movies or TV episodes that are in their catalogs. Netflix can also stream movies directly to TVs using devices like the Sony Playstation3, Nintendo Wii, and Microsoft Xbox 360.

Clearly, Netflix intends to build up a more loyal, recurring customer base, while YouTube might be attempting to knock on the door of the casual, one-time user. We'll see if YouTube sticks with that shorter-term focus.

The othersWith the difference in the subscription plans and the type of content they provide, it's highly unlikely that Google might take a bite out of Netflix's current user base.

On the other hand, Google might actually need to fight players like Amazon (Nasdaq: AMZN) , which also offers more single-serving video streaming services to users. With the Amazon Instant video service, customers sign in with their Amazon accounts, which can be used to pay for the films they want to watch. Films can either be shipped or streamed online.

The other player in this industry is the all powerful Apple (Nasdaq: AAPL) . Apple TV allows streaming of online films and TV shows to viewers on a pay-per-view basis as well. Apple's facility lets users watch movies on Mac or Windows PCs, iPhones, iPads, and iPods that are video enabled. With Netflix content also available on Apple TV, Google faces a tougher adversary here.

Fool's story: Take oneWith a different subscription scheme than Netflix, YouTube's new movie venture is not as likely to eat into Netflix's shares as Amazon's or Apple's. So, fellow Fools holding Netflix shares don't need to worry much. However, what becomes of the three ways battle of Google, Apple, and Amazon will probably look like an edge-of-the-seat thriller.

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Google's already given everyone about 10GB through gmail. Mine says I got 8GB i'm not using.

Why not add the google music locker/player thing to gmail, add the youtube movie player thing, and charge a small monthly fee to use it all. People would dump NFLX in a hurry. Then again, it would need to offer a catalogue like NFLX. But there's lots of potential there and they already have all that infrastructure.

The Amazon Cloud storage thing just opened with 5 measley GB. if my gmail had a media player I wouldn't even need to bother with Amazon. just create a music folder and upload!

but for movies, right now it just makes more sense to get a new movie at Redbox for $1, get old movies on NFLX for less than $10 every month, and use all the free Google stuff. Google could become the one I'm paying.

Unless they have a better collection of movies than Netflix, all of which I can view for about $6 per month, why would I switch? This is as idiotic as their Chromebook device that is about $50 more expensive than my laptop that can function as Chromebook as well as a Win 7 machine.